Errors and delays cost brokers and insurers over £280,000 a year
Bank errors and delays are costing the UK insurance industry more than £280,000 each year, as companies are forced to waste time chasing lost or delayed international payments, according to new research out today.
The findings from Travelex, the global business payments specialist, has revealed that sixty per cent of international transactions to or from UK insurance businesses experience problems - from unnecessary bank delays to missing payments.
The research also shows that UK insurance companies will make hundreds of international business transactions each year, worth over £1.5m per company. The investigation and recovery of these missing or delayed payments costs each insurance business over £280,000 a year – or £410 per company, per problem.
Travelex has identified the most common, cost-incurring problems faced by the UK insurance SMEs when making international payments. The top five points are:
- Banks taking deductions or fees without the clients’ knowledge
- Incorrect account names (i.e. the account name does not match with the account number, as held by the receiving bank)
- Human error, either by a correspondent bank or the receiving bank, or the customer
- Bank delays – slow transfer of funds through the bank system
- Unsophisticated local banking networks in certain countries
Tony Wilson, Director of Travelex’s global business payments division, said: “The demand for international business payment services is growing by 8 per cent year on year[1]. With an increasing number of the UK’s small to medium sized insurance businesses engaging in trade with their foreign counterparts, these figures illustrate just how often things can go wrong, and the subsequent cost of putting things right.
"We would urge any business involved with international transactions to think carefully about how they go about sending money abroad and, importantly, who they use to facilitate the payments. The knock-on effects of things going wrong can be crippling for a small business and go beyond a financial impact, reputations and business relationships can also suffer.”
